Chinese battery leader Contemporary Amperex Technology Co (CATL) is licensing its electric vehicle battery technologies to U.S. automaker Ford Motor for the latter’s battery factory in the state of Michigan in the United States. CATL, the world’s largest EV battery maker, did not disclose which generation of battery technology it will license. “We are working together to provide the market with the most competitive products,” the company said. The move came as Ford announced plans to invest USD3.5 billion to build an EV battery plant in Michigan. The plant, which is expected to open in 2026 and employ 2,500, will produce new lithium iron phosphate (LFP) batteries. Ford currently uses nickel cobalt manganese batteries, compared with LFP batteries, which have a lower energy density but are cheaper, have a longer shelf life and are less prone to overheating. Ford Chairman Bill Ford said that CATL will assist in helping the automaker speed up building the batteries themselves.
“Manufacturing these new batteries in the U.S. will help us build more EVs faster and will ultimately make them more affordable for our customers,” he said. Ford will own the new facility through a wholly owned subsidiary instead of operating it as a joint venture with CATL, following new U.S. tax credits for EVs that took effect under the Inflation Reduction Act passed last year. To be eligible for the tax credits, at least 50% of the value of the components of the EV battery must be manufactured or assembled in the U.S. In addition, EVs with battery components or materials sourced from “foreign entities of concern”, such as China, are excluded. “This cooperation model kills two birds with one stone. It not only enables Ford to obtain various subsidies promised in the act but also helps CATL to avoid foreign investment security reviews to reduce some risks,” said Lyu Xiang, Researcher at the Chinese Academy of Social Sciences (CASS).
According to consultancy SNE Research, total global usage of EV batteries hit 517.9 gigawatt-hours last year, soaring 71.8% compared with the previous year. The growth of Chinese battery firms has been showing accelerated momentum in recent years, as they accounted for six of the top 10 battery makers globally in terms of installations last year. CATL ranked first again with a global market share of 37%. Chinese EV maker BYD had the same market share of 13.6% as South Korea’s LG Energy Solution. China’s CALB, Gotion, Sunwoda and Farasis were also among the top 10, the China Daily reports.
Meanwhile, Chinese carmaker BYD, the world’s largest electric-vehicle (EV) maker by sales, will spend CNY8 billion on a new battery plant in Zhengzhou, the capital of central Henan province. The battery plant of Zhengzhou FinDreams Battery, a wholly-owned unit of BYD, will cover an area of 1.15 million square meters, with a production capacity of 40 gigawatt-hours (Gwh) upon completion. “BYD has seen its EV sales jump rapidly since last year, and it needs to boost its battery production to be ready for further growth,” said Phate Zhang, Founder of Shanghai-based EV news site CnEVpost.
The Hong Kong and Shenzhen-listed carmaker more than tripled its sales last year to 1.86 million vehicles, most of them in China. It also unseated Tesla as the world’s largest EV vendor in 2022. The U.S. carmaker delivered about 1.31 million EVs last year, falling short of its 1.4 million target. Unlike Tesla and other major Chinese EV start-ups such as Nio, Xpeng and Li Auto, which assemble premium EVs priced at more than CNY200,000, BYD’s battery-powered cars target middle-class customers in the world’s largest automotive market. BYD’s EVs are usually priced between CNY100,000 and CNY200,000.
Sales of new-energy vehicles, including pure battery EVs and plug-in hybrids, fell 6.3% in January after recording growth of 90% in 2022, the China Passenger Car Association (CPCA) said. “Although we are seeing softer demand for EVs since late last year and many leading EV makers have slashed their prices, BYD could benefit from that as it has a rather wide range of products priced at different levels,” said CnEVpost’s Zhang. Seagull, BYD’s new compact EV, is expected to debut at the 2023 Shanghai Auto Show in April. While its final price has not been disclosed yet, it is expected to be priced below CNY100,000.
Founded by Chinese billionaire Wang Chuanfu in 1995, BYD has been making vehicles since 2003. It mainly sells cars in mainland China, but is looking to become a global player with plans to expand in some overseas markets. The company’s blade lithium iron phosphate battery packs have proved to be very successful. Battery cells are arranged in a manner that increases energy density while enhancing resistance to overheating. BYD supplies these blade batteries to Tesla’s factory in Berlin. The company’s battery installations increased by 167% year-on-year in 2022 to 70.4 Gwh, the South China Morning Post reports.
